Over the past several weeks, Phoenix, AZ-based Cavco tried to persuade
Skyline's board to engage in a friendly discussion. Cavco claims it has various
proposals to improve Skyline's shareholder value which also includes an
outright purchase of Skyline at a significant premium to its current market
price.

However, Skyline's board failed to respond within the
stipulated time coaxing Cavco to announce the proposed buyout offer which it
claims will provide liquidity for Skyline shareholders at a premium of 29% to
66% above the Sep 24, 2014 closing price of $2.71 per share.

Skyline has reported pre-tax losses for seven consecutive
financial years - 2008 to 2014 - due to distressed manufacturing housing
industry conditions, tightening credit markets and unfavorable economic
conditions. The company is also facing cash crunch. Its share price has
declined 45% year-to-date through Sep 25. Last month, Skyline's independent
accounting firm also issued a qualified opinion regarding its ability to
continue as a going concern.

Cavco claims that
Skyline's management has not taken proper steps to address its challenges.
Cavco believes that it has the experience to improve results at troubled
manufacturing housing companies and thus a merger would be in the best interest
of Skyline shareholders, employees and customers.

A day earlier, Skyline expressed interest in selling its
Recreational Vehicle Division whose sales declined 33% in the first nine months
of fiscal 2014 to another company to improve its cash position. However, Cavco
believes that this would only provide the troubled company short-term liquidity
without addressing challenges at its larger housing segment which has been
accounting for the majority of its losses.